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Armenian Pension Reform Delayed Further


Armenia - Young workers demonstrate against a controversial pension reform in Yerevan, 8May2014.

Armenia - Young workers demonstrate against a controversial pension reform in Yerevan, 8May2014.

The government moved on Thursday to postpone by one more year the full entry into force of its controversial reform of Armenia’s national pension system which sparked angry street protests two years ago.

The new system requires workers born after 1973 to earn most of their future pensions by contributing sums equivalent to at least 5 percent of their gross wages to private pension funds until their retirement. The reform, initially introduced in January 2014, met with fierce resistance from many affected Armenians, most of them employed by private firms.

Armenia’s Constitutional Court effectively froze it in April 2014. The government responded by making the pension reform mandatory only for 65,000 or so public sector employees. A law subsequently passed by the Armenian parliament allowed people working for private entities not to be covered by the new system until July 2017.

Prime Minister Hovik Abrahamian’s cabinet approved on Thursday draft amendments to the law which would extend the deferment until July 2018. It attributed the move to its ongoing efforts to reform Armenian tax legislation.

A government statement said that a new Tax Code is due to be enacted in late 2017 and that an electronic taxpayer database envisaged by it will have to be made “compatible” with the new system of collecting pension contributions. “According to preliminary estimates, this work will be completed in the first quarter of 2018,” it said.

Mane Tandilian, a leader of an Armenian pressure group campaigning against the reform, dismissed the official rationale for the delay. She claimed that the Armenian authorities simply want to avoid renewed protests by reform opponents ahead of parliamentary elections due in April or May 2017.

Tandilian also said her Dem Em (I Am Against) movement continues to insist on a complete abolition of the reform backed by Armenia’s Western donors. “The existence of that law is unacceptable regardless of when it will take effect,” she told RFE/RL’s Armenian service (Azatutyun.am).

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